Top-Grade Issues Gain on Wall St.

Declining interest rates made Wall Street a fertile environment in the third quarter for American companies seeking to borrow, so long as their bonds were investment grade.

But the quarter was not particularly good for investment banks, as a declining appetite for new issues of common stock and the troubles of the high-yield ''junk bond'' market chopped two of the businesses where Wall Street earns much of its fees.

A total of $71.1 billion in domestic securities was issued in the quarter ended yesterday, according to the Securities Data Company. That was up 10 percent from $64.7 billion in the third quarter of 1988. Effect of 'Junk Bond' Troubles

In some ways, the increase in corporate debt issuance reflected the difficulties of the ''junk bond'' market, which were precipitated by the financial troubles of the Campeau Corporation, a large junk bond issuer, underwriters said. As the view spread that outside raiders would have more difficulty starting takeover bids because of the trouble in the junk bond market, the appetite among investors for investment-grade debt increased, they said.

''As the takeover environment has changed, the investors out there have perceived less risk in buying corporate bonds,'' said Roger M. Vasey, senior vice president at Merrill Lynch Capital Markets. ''It was an excellent quarter for us in a number of product areas.'' Buyers of high-grade corporate bonds have feared that takeovers could convert companies' debt from investment grade to speculative, causing bond prices to tumble.

Industrial and banking companies led the way in borrowing. Many of the industrial concerns were attracted by the decline of interest rates, and they issued bonds to replace high levels of commercial paper. The banking industry, faced with new international capital requirements, issued debt in an effort to conform to the rules, the underwriters said. An 11.6% Rise in Bond Issues

Reflecting the demand in the debt market, a total of more than $61.6 billion in bonds was issued in the third quarter, up 11.6 percent from $55.2 billion in the third quarter of last year, according to Securities Data.

But despite record performance in the Dow Jones industrial average, corporations continued to shy away from issuing common stock, as they have since the market crash in October 1987. Equity issues dropped 20.1 percent in the quarter: companies issued $6.1 billion in common stock, compared with $7.7 billion in the third quarter last year.

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Also, as uncertainty spread through the junk bond market, issues began to drop off. Only $5.3 billion in junk debt was issued in the third quarter, down 24.2 percent from $7 billion in the period in 1988. But for the first nine months, the volume of $20.2 billion in junk underwritings rose 4.5 percent from a year earlier. Total Underwritings Up 1.9%

For the first nine months of the year, underwritings of all domestic securities totaled $214.5 billion, up 1.9 percent, from $210.4 billion in the period of 1988. Debt issues rose, but the volume of new common stock issues fell 37.5 percent to a five-year low of $15 billion, from $24 billion.

For the first nine months, Merrill Lynch Capital Markets ranked as the leading underwriter of domestic issues, being the lead manager of $35.5 billion in securities, or 16.5 percent of the total market. But for the third quarter, Goldman, Sachs & Company, which ranked second for the year to date, finished first, with $11.9 billion in underwritings, or 16.7 percent of the market. Merrill was second, with $10.3 billion.

For the first nine months of 1989, Drexel Burnham Lambert Inc.'s legal problems may have cut into its dominance of the junk bond market. Although it remained the leading underwriter, its market share fell to 42.7 percent, from 49 percent a year earlier. In the third quarter, its market share fell to 33.1 percent, as it underwrote $1.7 billion in new junk issues. Still, that was more than twice the $775 million underwritten by Salomon Brothers Inc., which ranked second. Leader in Common Stock Issues

In common stock issues, Goldman, Sachs was the leading underwriter for both the quarter and the first nine months.

Fees for the underwriters came to $2.2 billion in the first nine months, Securities Data said, down 26.7 percent from $3 billion a year earlier. In the quarter, the total fell 18.6 percent, to $768 million, from $943 million a year earlier.

Merrill ranked first in fees for both the quarter and the nine months, with $132 million in the quarter and $332 million for the year. Drexel was second for the nine months, with fees of $314 million, but fell to seventh in the quarter, with $53 million, a third of the fees it had in the corresponding quarter of 1988. Securities Data said $50 million of Drexel's fees came from junk bonds.

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A version of this article appears in print on September 30, 1989, on Page 1001031 of the National edition with the headline: Top-Grade Issues Gain on Wall St. Order Reprints|Today's Paper|Subscribe